Pepsi Co ran an ad and promotional campaign in 1996 called the “Drink Pepsi Get Stuff” campaign. The enormously successful campaign allowed customers to claim prizes in exchange for points on PepsiCo beverage containers, and points could be combined with
Question:
Pepsi Co ran an ad and promotional campaign in 1996 called the ‘Drink Pepsi Get Stuff’ campaign. The enormously successful campaign allowed customers to claim prizes in exchange for points on PepsiCo beverage containers, and points could be combined with cash payments to obtain prizes. The campaign was so successful that the second round of ads and promotions was not run because the prizes were nearly exhausted. In one television ad, Pepsi Co pictured a Harrier jet as a satirical spoof on the prizes available under the campaign. The jet was offered in the ad for 7 million beverage points. Harrier jets are made only for the Marine Corps and are not sold in the open market. They cost $33.8 million each and can be produced at a rate of only one dozen at a time. John Leonard, a 21-year-old business student, called Pepsi Co and was told he would need to drink 16.8 million cans of Pepsi in order to obtain the required points. He was also told that he had the option of buying Pepsi Co points for 10 cents each. Leonard developed a pool of investors (Pepsi drinkers) and delivered 15 PepsiCo points and a check for $700,008.50 for the remaining 6,999,985 points plus shipping and handling. Pepsi Co refused to provide Leonard with a Harrier jet because it said the ad was not an offer but a joke. Leonard filed sue but Pepsi Co had already filed a pre-emptive suit asking that Leonard’s suit be dismissed and declared frivolous and that Pepsi Co should be reimbursed for its legal expenses.
a) Define the elements of a contract?
b) What are the elements of an offer and an acceptance?
c) Did PepsiCo make an offer?
d) Did Leonard accept?
d) Was there a contract? Why or why not. Discuss.
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Novella April 5, 2023 в 05:42a) The elements of a contract are: offer, acceptance, consideration, mutual agreement, capacity to contract, and legality of purpose. b) The elements of an offer are: (1) intention to enter into a legal agreement, (2) certainty and definiteness of terms, and (3) communication of the offer to the offeree. The elements of acceptance are: (1) unconditional agreement to the terms of the offer, (2) communication of the acceptance to the offeror, and (3) valid acceptance. c) PepsiCo did make an offer in the advertisement for the Harrier jet. However, it was a satirical spoof and not a serious offer. It was not intended to be an offer that could be accepted, as the terms were not intended to be taken seriously. d) Leonard attempted to accept the offer by delivering 15 PepsiCo points and a check for $700,008.50 for the remaining points needed to obtain the Harrier jet. However, PepsiCo did not accept his offer, as they claimed that their advertisement was a joke and not a serious offer. e) There was no contract between PepsiCo and Leonard because the offer was not a serious one, and therefore, no valid acceptance was possible. The advertisement was clearly intended as a satirical spoof, and no reasonable person would have interpreted it as a serious offer to sell a Harrier jet. Furthermore, PepsiCo's response to Leonard's attempt to accept the offer demonstrated that they did not intend to enter into a contract. Thus, there was no mutual agreement between the parties, which is an essential element of a contract. Additionally, there was no consideration exchanged, as Leonard's attempt to accept the offer did not provide anything of value to PepsiCo. Therefore, there was no contract between the parties.
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